Rep. Ed DeLaney: Braun’s tax proposal puts schools, others in peril

To some extent, Mitch Daniels’ property tax reform looks like it is running out of gas after some 20 years. Mike Braun’s proposal to remedy this is simply full of gas, of a different sort. Let’s call it hot air.

Braun is correct that higher home values may allow for the imposition of higher property taxes on those homes. That is simple economics. Higher home values make people happy when they sell their house but not so happy when they pay property taxes or try to buy a new home. Braun would “remedy” the effects of this by changing the tax burden to benefit young families and senior citizens.

This inevitably causes a tax shift to the detriment of all others. The Indiana Supreme Court provoked our last round of tax reform when it found we had favored people with an old home over people with a newer home of the exact same value. The court forced us to change course. Let’s not go down this road again.

Braun does not like referenda. He would like to limit the ability of our families to tax themselves when they see their children and community have a need for buildings, books or better-paid teachers. That is a direct democracy. Nonetheless, I do believe that if we increase state funding, there will be less need for referenda. We might no longer need to tax poor families via referenda.

One thing that stuns me is Braun’s silence as to how we got where we are today. He has no explanation for why his allies stood by while these problems grew. Let me suggest one reason: The supermajority has distracted itself with building up charter schools, and now with throwing money at private schools. Our state constitution requires that we have a uniform system of common schools. The supermajority has totally deviated from that. There is nothing uniform about our school system. Our founders had it right; you need a basic commitment to educating all for the system to succeed.

What is the logic behind Braun’s proposal? Much of the “logic” is an idolatry based around the size of the state surplus. The surplus can grow so large that it becomes a way to hide public funds that should go to schools. In short, we need to manage our surplus and our state taxes in a responsible fashion. Republicans used to know how to do this, as did our most recent Democratic administrations.

Braun needs to sit down and think carefully about his proposals for our Indiana tax system. It is not clear why thinking citizens would vote for him based on this first attempt. The economic lever Daniels used was reducing the reliance of schools on local property tax by sending increased state dollars to the school systems. Fundamentally, that is what we need to do again. As a byproduct of this, the pressure on the property tax system from other governmental units is reduced.

We need to be careful with tax policy. If Braun’s proposal were adopted, not only would our school finances be in peril but so would the funding of police, fire, roads and other local services. There are 2,315 local units of government in the state of Indiana dependent on property taxes. A one-size-fits-all approach is not the answer.•

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DeLaney, an Indianapolis attorney, is a Democrat representing the 86th District in the Indiana House of Representatives. Send comments to ibjedit@ibj.com.

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